A year ago, Forbes was certain that more law firms would go the way of Dewey & LeBoeuf.
“The demise of Dewey is blamed on the long-term financial commitments the firm made to lure rainmaking partners from other firms,” wrote Max Harris, chief executive of Axiom, a 900-person new-model legal services firm, for Forbes.
“However, the real problem is less the commitments themselves and more a firm structure that worships short-term interests and punishes long-term investments of any kind.”
Why? Because most law firms are structured in a way that allows partners to freely move firms (and take clients with them).
“The hyperactive market for mergers and lateral partner moves, akin to unrestricted free agency in sports, presents law firm managers with a seemingly intractable dilemma,” Harris lamented.
“Investment in the future, whether aimed at transcending industry pressures by acquiring game-changing talent or at innovating through increased use of technology and more streamlined delivery models, requires a deferment of near-term compensation, and thus it risks inciting an exodus by a firm’s top producers.”
However, not all law firms need to be crippled by their own organizational structure. In fact, law firms these days are not going down like Dewey. Instead, law firms are looking for new ways to market one of the oldest professional services.
Uniqueness is a great way to attract clients and retain employees. In a competitive market, it’s all about what sets your firm apart, rather than how your firm conforms to standards. In the past, clients wanted law firms that looked like a law firm (oak molding and boat paintings), moved like a law firm (billable hours and face time with the partners) and talked like a law firm (lots of legal jargon) to quell their fears about uncertain litigation.
Today, clients are looking for innovative billing practices, modern legal technology, and low-cost services. Associates are looking for adequate incentive to join and then stay in a firm.
How do you achieve uniqueness? Discover your firm’s value-add. Let’s take two examples.
According to Gabriel Cheong, owner of Infinity Law Group in Quincy, Mass. and Cambridge Divorce Group in Cambridge, Mass., over 90 percent of litigants in Family Court are unrepresented, pro se litigants. To fill this gap and differentiate his practice, Cheong is in the business of selling legal services, not attorneys.
See, Cheong’s firms provide unbundled legal services (or Limited Assistance Representation) that give individuals looking for help, but not representation, the legal advice they need at a low fee. Uniqueness in this case stems from meeting the client-side of the legal business.
How are clients being under-served? If you can’t answer this question for your legal niche already, just ask your current clients. Circulate a survey or mention it in the next meeting. Then, go back to the office and brainstorm new ways to meet this need.
Next up, Finnegan, Henderson, Farabow, Garrett & Dunner have chosen to solve a persistent associate-side problem: law school loans.
Does your law firm need to recruit and retain top new talent? Finnegan, Henderson, Farabow, Garrett & Dunner provide their attorneys with a law school loan payback scheme. Attorneys who work for the firm during law school as student associates qualify for the reimbursement program.
“I signed some checks for Harvard and Stanford in the past year that nearly made me choke,” joked Barbara McCurdy, managing partner, to the Washington Post. But “the benefit for us is that we attract really excellent talent.”
The program isn’t just for lawyers, either.
Lawyers don’t underestimate the value of a good assistant or paralegal. Often these support services make or break a case. That’s why it’s so important to retain talented staff.
At Finnegan, Henderson, Farabow, Garrett & Dunner, tuition reimbursement for non-attorney staffers is available at 100 percent for straight-A employees. B-students are eligible for 80 percent reimbursement and a C-students eligible for 60 percent, according to the Washington Post.
Your firm will only excel to the extent your human capital is excellent.
Whether it’s on the client-side or associate-side of your legal business, look at how your firm can stand apart from the rest. Do you feel secure that your equity and managing partners are here to stay? If not, what is your retention strategy?
Forbes was wrong to think that the legal market can’t handle harsh competition. Law firms are not all going bust like Dewey & LeBoeuf. Nevertheless, survival still depends on successful management of your firm’s long-term assets and investments. That’s right, long-term….
So, take stock, and stand out like a sore thumb. In law, a little soreness from growing pains may be a good thing.